Active and passive investment strategy
We now consider the investment strategy, on the pros and cons of active and passive investment strategies. They have significant differences. To start with, that to achieve a positive result using active strategies will have to spend considerable time on the training of many wisdoms.
About passive investment strategies we can say that they are more appropriate for use when investing in bonds or mutual Funds. Using these strategies can be only once a year to make changes in the composition of their portfolios. And about the active strategies you can say that they are optimal for use with such complex and more profitable instruments, as futures, options and shares.
We have mentioned that the futures and options are sufficiently complex investment tools, with which the work is not necessarily to be effective portfolio. So again - the use of active investment strategies involves the proper level of training, so you need a lot of time to devote to their education. So, read books, attend seminars and trainings, practice on the game accounts, which provide many brokers. And only after a few months you can feel yourself in the stock market like a fish in water, and exit at him with real money.
Now let's consider the advantages and disadvantages of these two investment strategies. Everything in order. The good news is that for passive investment strategies is not required experience, the investment is not time-consuming, there is a possibility to get the most from growth in the market, there is no loss in side trend, it is impossible to lose more of the market. The bad news passive investment strategies in the fact that in conditions of falling of the market get the weight loss, it is impossible to strongly outperform the market, it is impossible to receive annual yield, as recessions in the market will always be present.
Now consider the active investment strategy, requiring the daily revaluation of the portfolio. Pluses of these strategies is that you can reduce losses in conditions of falling of the market, there is an opportunity to receive profit. But the active strategies there are a lot of disadvantages. Firstly, active investment strategy require experience, abilities, knowledge and etc. Secondly, the investment will take a long time - for the implementation of the strategy requires daily monitoring of the market. Thirdly, in a growing market there is a loss of profit, as it is impossible to accurately to a second calculate the time for entering the market.
